1. A CRITICAL EVALUATION OF THE STRATEGIC CHOICES OF TELKOM AND
WHETHER THEY ARE APPROPRIATE OR NOT
According to Grant (2010:23) an organisation strategy can be identified or located in
three places: in the heads of the chief executive and senior managers, in their
articulation of strategy speeches and written documents and decisions through which
strategy is enacted. From the Telkom view, the strategy statements can be identified
in its vision, mission and values. These are as follows:
Vision
To be Africa’s preferred ICT Solutions provider.
Mission
To be a leading South African-based international ICT services group focused on
long term sustainable profitability through growth in existing new markets.
Values
Continuous performance improvement
Honesty
Accountability
Respect
Teamwork
Strategic choice is the third logical element of the strategy formulation process. It
therefore entails identifying options, evaluation of options and selecting a strategy.
According to Boojihawon and Segal-Horn (2010) the process of strategic choice
requires managers to identify several potential options, evaluate them and select the
most appropriate for his or her organisation and context.
Viney and Gleadle (2010:7) argue that in defining organisational objectives and
implementation of selected strategy, comes the identification, evaluating and choice
of strategic options, based on the analysis of external and internal data.

2. Therefore, in evaluating the strategic choice of Telkom, the discussion will firstly look
at its strategic objectives/intent and secondly, evaluate its recent strategic decisions
it has taken as a result of those objectives.
The aim of Telkom is to continue to strengthen their position as a communication
champion across the African continent. This will be done through the following
strategic intent:
To offer our customers enhanced bundled packages and tailored calling plans
that will successfully grow annuity revenue;
To use our unique fixed-mobile capability as a platform for future growth. We
intend to provide customers with array of ICT services, both voice and data,
fixed and mobile. It should also enable us to leverage the strong relationships
we have with our current corporate customers by extending the bouquet of
services we offer to them;
To utilise the strength and reliability of our unique Next Generation Network
and infrastructure to bring high quality broadband products to the market.
These new and exciting ‘content rich’ offerings are particularly applicable to
digital home consumer markets such as gated communities; and
To become a Pan-African integrated service provider by making the Telkom
brand synonymous with the best products and services on the continent
Strategic decisions or options that Telkom has taken as a result of its objectives will
be highlighted below:
- Telkom has increased its global connectivity by entering into strategic
memorandum of understanding with one of the largest telecommunications
companies in the world, AT&T, which will connect Telkom’s regional network
with AT&T global network. In this regard Telkom has co-operated with AT&T
for each partner to contribute something and moreover Telkom will benefit in
terms of being connected to AT&T global network

3. - Telkom made its acquisition outside South Africa, namely, Africa Online,
which is the largest Pan-African Internet Service provider in Sub-Saharan
Africa
- Telkom has pursuit a revenue growth opportunities outside the borders of
South Africa. This was spearheaded by the acquisition in 2007 of Nigeria
based Multi-Links.
- Telkom also acquired 100% interest in MWEB Africa Limited. MWEB Africa is
a group of companies offering internet services and its own VSAT access in
Sub-Saharan Africa
- Telkom is also investing in the Next Generation Network (NGN) to support
converged services and the massive amounts of bandwidth that go with them
- Telkom ADSL leads the broadband explosion with Telkom aiming to have
achieved an ADSL penetration of 15% to 25% of total access lines. Demand
is also being stimulated by the growing use of internet in the country’s
education system and increasing expectation for learners to use internet as a
research resource. The proven speed of Telkom service also drives growth in
the ADSL subscriber base.
- Telkom has rolled out 141 W-CDMA (Wideband Code Division Multiple
Access) sites in major metropolitan areas throughout South Africa. This W-
CDMA allows Telkom to deploy fixed-line look-alike services with regional
fixed numbering plans instead of deploying copper.
- Telkom also moved into offering a fully fledged mobile service called 8.ta,
which is a growth segment and mechanism against mobile cannibalism.
In the context of the strategic options outlined above, it could be said that Telkom
strategy was to remain focused on pursuing growth into Afican markets, and
reaching all its customers, new and existing with its new and existing communication
services and products. We have seen a number of acquisitions by Telkom to enter
into new markets and to partner/form alliances with other organisations such as
MWEB, Africa Online and AT&T. This signaled a growth strategy by Telkom.
Telkom ventured into mobile business for growth and also due to the growing
pressure from mobile operators to its international fixed-line communications.

4. From Porter’s generic strategies, it could be suggested that Telkom in its growth
strategy or plan, favours a differentiations strategy
According to Porter, there are three generic strategies that a company can undertake
to attain competitive advantage: cost leadership, differentiation, and focus. Porter
(1985) cited by Bakhru (2010:63) and Sidahmed (2006:9) argues that although
organisations can have a myriad of strengths and weaknesses relative to
competitors, they essentially compete in one of two ways: on the basis of cost or
differentiation. Porter’s generic strategies are shown in figure 2.1.
Figure 2.1: Porte’s generic strategies
A company pursuing a differentiated strategy seeks to be unique in its industry along
one or more dimensions that are valued by buyers. It selects attributes that buyers in
an industry perceived as important and positions itself to meet those needs as fully
as possible (Viney and Gleadle, 2010).
Is Telkom selected competitive strategy appropriate or not?
In responding to the above question, three sets of generic testing criteria by Johnson
and Scholes (2003) cited by Viney and Gleadle (2010:52) will be used, namely,
sustainability, feasibility and acceptability
Suitability

5. Telkom’s proposed strategy is appropriate interms of it suitability since it matches or
addresses its strategic objectived. For Telkon to grow , it needed to enter new
markets which happened throught their differentiation strategy. Therefore, with its
acquisition strategy of communication operators, it was able to penetrate new and
existing markets.
Feasibility
In terms of whether the strategy is feasible, Telkom strategy might not be feasible
due to their shrinking revenue & profits, but with its high quality and experienced
staff, technology and physical resources, Telkom strategy might meet its objectives
Acceptability
The strategy might not be accepted consideration those acquisitions that ended up
being sold to other providers due to the decline in revenue and its cost.